They range from $148 per ton, charged by Jihad Construction Company to handle garbage for Bekaa and Hermel, to $189, charged by Batco and Lavajet in the North and Akkar, and prices higher still for likely noncompetitive bids
previously awarded seven leases, two through noncompetitive bids
, for projects in the Atlantic Ocean, including Cape Wind in Nantucket Sound.
2) Noncompetitive bidders submit a quantity bid, up to $1 million for bills and $5 million for notes and bonds, but do not specify any yield; the total amount of noncompetitive bids is subtracted from the dollar amount of the security to be auctioned, and what remains is available for competitive bidding.
If the amount of noncompetitive bids is assumed to be $10 million, the quantity available to the two competitive bidders is $40 million.
However, the Back-Zender model assumes that bidders are risk neutral; by definition, risk-neutral bidders do not care about the risk that noncompetitive bids may cause the low-yield points in their steep demand schedules to be realized as auction-clearing yields.
The higher the amount of noncompetitive bids is, the lower the available supply is for competitive bidders and the higher the chances are that the auction will clear at the low-yield (high-price) points of the bidders' steep demand schedules.
Chatterjea and Jarrow (1995) consider the preauction when-issued market and the postauction secondary market but ignore noncompetitive bids and do not allow for bidders (assumed to be risk neutral) to submit demand schedules; instead the bidders are allowed to submit bids only for the entire quantity to be auctioned.